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July 09, 2021 at 01:58 PM
What You Need to Know
- As a result of the firm's failures, an independent RIA was able to misappropriate $8 million from at least 15 SAA clients.
- The failures occurred in several units of the firm, according to the SEC.
- Securities America also agreed to cease and desist from further securities violations and retain an independent compliance consultant.
Securities America Advisors agreed to pay $1.75 million for failing to protect clients from losing about $8 million in an independent advisor’s Ponzi scheme, according to the Securities and Exchange Commission.
Without admitting or denying the SEC’s findings, the Advisor Group subsidiary also agreed to cease and desist from further securities violations and retain an independent compliance consultant.
Advisor Group did not immediately respond to a request for comment Friday.
According to an SEC order, from November 2014 to March 2018, Securities America (SAA) adopted the same policies as Securities America Inc. (SAI) for safeguarding client assets from misappropriation. SAI is the introducing broker for SAA advisory clients and both have been owned by Advisor Group since the merger of Advisor Group and Ladenburg Thalmann was finalized in February 2020.
SAI’s Financial Investigations Unit, Cashiering and Trade Support had primary responsibility for identifying potential misappropriation of SAA client assets, according to the SEC. But they failed to implement required policies and procedures, the SEC alleged.
According to the SEC order, FIU’s automated Trade Monitor surveillance system generated multiple alerts for potentially suspicious withdrawals from client accounts but its analysts didn’t carry out the prescribed processes for investigating those alerts.
